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Ah, apologies for not explaining more. What I meant was that if a congressperson says "I will buy $100 worth of $SMALLCO in two weeks", that would artificially

Ah, apologies for not explaining more. What I meant was that if a congressperson says "I will buy $100 worth of $SMALLCO in two weeks", that would artificially increase the price of that stock, and the congressperson would get less money / traders would profit slightly by selling shares they got cheaply. This effect is what I thought you were concerned about. Such an effect can only happen if these known trades are a significant fraction of the market cap, or the activity, on that stock. The reason I'm talking about small cap stocks is that those are the only ones I think such side-effects would occur on, and such manipulation wouldn't really be feasible for things like large index funds or AAPL or such. Hopefully it makes sense what I'm trying to say now? It would indeed have severe negative side effects for a subset of possible trades, but I don't think those trades are reasonable ones to make.

filoleg 5y ago
I understand what you are saying now better, thanks for clarifying. I still disagree that it would only affect small cap tickers. If it was only small cap tickers like you are saying, I would have been all in favor of your proposal with zero hesitation or second thoughts. While Apple might be an outlier example, I think that a congress person heavily investing into even significant cap tickers (like Palantir or Ford or Pfizer or etc.) could move the market and turn into a self-fulfilling prophecy. I am not worried about the investment dollar amount itself being the catalyst (because you are correct, senators don't have the raw amount of money needed to move the tickers by its own virtue), but everything else influenced by it. If everyone saw that some senator is extremely bullish on something like Ford, institutional investors will likely jump onto it as well (and large institutional investors definitely can affect the market with such moves, as they quite often do). Not even mentioning retail, but I agree that it isn't that important and can be disregarded for the purpose of this conversation. You are right that the retail dollar amounts aren't really high enough to move the ticker on their own for non-small-cap tickers (but it can make the pump from large institutional investors more significant).

filoleg 5y ago

I understand what you are saying now better, thanks for clarifying. I still disagree that it would only affect small cap tickers. If it was only small cap tickers like you are saying, I would have been all in favor of your proposal with zero hesitation or second thoughts. While Apple might be an outlier example, I think that a congress person heavily investing into even significant cap tickers (like Palantir or Ford or Pfizer or etc.) could move the market and turn into a self-fulfilling prophecy. I am not worried about the investment dollar amount itself being the catalyst (because you are correct, senators don't have the raw amount of money needed to move the tickers by its own virtue), but everything else influenced by it. If everyone saw that some senator is extremely bullish on something like Ford, institutional investors will likely jump onto it as well (and large institutional investors definitely can affect the market with such moves, as they quite often do). Not even mentioning retail, but I agree that it isn't that important and can be disregarded for the purpose of this conversation. You are right that the retail dollar amounts aren't really high enough to move the ticker on their own for non-small-cap tickers (but it can make the pump from large institutional investors more significant).